May 10, 2011

ACLU Asks Court to Reconsider Whistleblower Secrecy Ruling

Three advocacy groups challenging the secrecy provisions that often keep whistleblower suits confidential for years want a federal appeals court in Richmond to revisit its dismissal of a case that sought to open up False Claims Act litigation to greater scrutiny.

A divided three-judge panel of the U.S. Court of Appeals for the 4th Circuit in March upheld the dismissal of the suit, saying the sealing provision under the FCA does not violate public access to court records and proceedings. The sealing provision, the court said, maintains the integrity of Justice Department investigations into allegations of fraud.

The plaintiffs—the American Civil Liberties Union, OMB Watch and Government Accountability Project—alleged the automatic 60-day sealing provision for whistleblower suits prohibits judges from deciding on a case-by-case basis whether any individual suit should be kept secret. The groups today asked for clarification of the panel ruling and for the full court to hear the case.

“Until this decision, this Court had been in the forefront of assuring that proceedings of the nation’s courts be open and transparent,” Rebecca Glenberg of the ACLU in Richmond said in court papers (PDF).

The plaintiffs’ lawyers noted in the filing that the appeals court said a whistleblower is prohibited from disclosing the existence of a suit but is free to speak about the underlying fraud allegations.

But the panel majority—Judges Barbara Milano Keenan and James Dever III, a North Carolina federal trial judge—failed to explain how disclosure of an FCA suit would impede a government probe but the release of the underlying allegations that form the basis of the suit would not, the ACLU said.

“Congress was concerned that the target not be tipped off, but if the relator does provide evidence of the fraud and the name of the alleged target to the public, the target will undoubtedly be tipped off,” the ACLU lawyers said in today’s filing.

The Justice Department has not filed a response to the plaintiffs’ lawyers’ request that the full 4th Circuit hear the dispute. More background on the case here.

On April 5, the National Whistleblowers Center urged the plaintiffs’ lawyers not to ask the appeals court to reconsider its earlier ruling. “[W]e strongly believe that this dismissal should not be appealed,” the center’s executive director, Stephen Kohn, and other officials said in a letter to the ACLU.

The NWC said the seal provisions encourage whistleblowers to report fraud and waste allegations. Whistleblowers, the center said, need to protect their confidentiality in the early stages of exposing wrongdoing.

“Most whistleblowers are afraid of retaliation,” the center said. “The sooner they have to expose their identity, the sooner they will suffer termination of their employment, isolation from their friends and co-workers, or even other more serious forms of retaliation."

The center’s lawyers, including Kohn, said “forced disclosure” of the identities of whistleblowers before the government has fully investigated a case “would subject the whistleblowers to the full range of retaliation that corporate giants, government officials or local thugs might deliver.”